Project Summary Organ transplantation is highly successful in the treatment of end-stage organ failure. Although first year graft survival rates are 90 %, this initial high success rate drastically declines to less than 50 % within 10 years. The cause for loss of graft function is chronic rejection, which, however can be prevented by the induction of transplantation tolerance, a goal that has not been achieved in clinical transplantation. One established approach to achieving tolerance is by establishing hematopoietic mixed chimerism through bone marrow transplantation of the donor into the recipient. Due to the severity of the pre-conditioning regimens required to protect bone marrow cells from rejection, this procedure is often associated with significant morbidity and economic cost, limiting its use to the treatment of life-threatening hematopoietic malignancies. In contrast, mouse embryonic stem cells (ESC) are poorly immunogenic because of their low expression of MHC class I and lack of class II molecules. By exploiting their pluripotency, we can coax ESC to form hematopoietic precursor cells (HPCs) that can safely be used to induce mixed chimerism across major histocompatibility barriers with minimal requirement for immunosuppression. Here, we will utilize the homeodomain transcription factor HOXB4 that confers self-renewal and expansion capability to hematopoietic cells allowing us to exploit existing ESC lines for therapeutic purposes. To optimize this opportunity, HOXB4 was cloned in frame with GFP, so that as the cells differentiate, they turn green. Isolation of CD45+GFP+ progenitor cells assures removal of undifferentiated cells avoiding tumor formation. The cells will be transplanted into mice to establish mixed chimerism. Once stable mixed chimerism has been established, we will transplant skin allografts in allogenic recipient mice. Our Specific Aims will address: 1. immunogenicity of ESC-derived HPCs; 2. establishment of mixed chimerism and graft tolerance and 3. cell fusion of HPCs with host cells post transplantation. Achievement of these goals will establish ESC as a new source of hematopoietic cells that can be used for tolerance induction without harsh immunosuppression of the recipient.